1. IB Business and Management
External Environment
IB Business and Management

2. Learning Outcomes
Prepare a PEST analysis for a given situation and use it to analyse the impact of the external environment on a firm
Evaluate the Impact on a firm’s objectives and strategy of a change in any of the PEST factors
Explain how external opportunities and threats can impact on business decision-making and SWOT Analysis

3. Business Activity External Factors External Factors Finance Marketing
Outputs
Goods and services
Inputs/ resources
Land Labour Capital Enterprise
The organisation
People
Production
External Factors

4. Achieving business objectives….
In the pursuit of achieving their aims and objectives businesses face challenges and opportunities from outside the organisation…… We can call these PEST Factors (Or PESTLE, LEPEST)

5. So…. What does PESTLE mean?
P E S T L A.K.A PEST, LEPEST, STEEPLE

7. PEST Analysis
A PEST analysis of an audit of the external environment of a firm.
External influences are outside of the control of the firm
It involves trying to identify any potential Opportunities or Threats that the firm may be presented with

8. Why do a PEST Analysis?
‘Forewarned is forearmed’ What is the meaning of this saying?
PEST may be done at any time but is particularly useful at times when strategic decisions are being made
Could be done in general or for a specific industry

9. Task - Brainstorm What might these external factors be? Political
Technological
Social
Economic

10. Political
How and to what degree a government intervenes in the economy. Specifically, political factors include areas such as:
Tax policy (Consumer and Corporate)
Employment law
Environmental law
International trade restrictions
Competition legislation
Consumer protection Law
Government attitude and procedures
Political stability

11. Economic Economic Growth Monetary Policy (interest rates)
Government Spending
Unemployment
Exchange rates
Inflation
Trade Cycle
Consumer Confidence

12. Social Income Distribution
Demographics (Age, Gender, Family Size, Occupations)
Social Mobility
Lifestyle
Attitudes to Work and Leisure
Fashions and Fads
Attitude to work
Living conditions

13. Technological Government spending on research R&D activity
Speed of technology transfer
New discoveries
Rates of obsolescence
Energy use and costs
New materials
Developments and availability of ICT
Internet

14. Your Task….
We don’t have time to cover all of these PEST factors in detail.
Over half term please read the ‘What you need to know’ document
Add any questions you might have to the google doc ‘PEST Questions’
We will go through any questions after the holidays.